How's the ETP doing so far?

www.kopihangtuah.blogspot.com

GNI annual growth of 6% from now to 2020 resulting in income per capita of USD15,000 from a low USD6,700 that we have today.

FO Summit 2011 organised by ACCA that I attended recently was quite a good one although many of the presentations revolved around accounting profession, which are dry, even for an accountant like me. Nevertheless, it wasn't a wasted evening for I was delighted that at least one session touched a topic close to my heart: National Economic & Investment Outlook 2011/2012 with the implementation of the ETP (Economic Transformation Programme).

Earlier I had posted a few blogposts, for which, can be updated now based on the presentation at the CFO Summit 2011. Those earlier posts were:

1. Najib is not 'Bapa Slogan' after all
2. "Penjodohan Pekerjaan"
3. RMK10 RM230B By RM
4. NEM means?

2 senior offcials, En. N. Parameswaran and En. Christopher Tan, shared some statistics and salient points on the progress of Government's efforts via ETP. The former is the Senior Director for Services under Malaysian Industries Development Authority (MIDA) and the latter is the Director for Electrical & Electronics Division of PEMANDU. Information revealed suggest that progression is apparent but continuous efforts are still needed to achieve the objectives sought.

The ETP essential pillars are: (1) High Income; (2) Inclusiveness and (3) Sustainability. All 3 should work simultaneously in order for Malaysia to be a High Income Nation by 2020. This is on the back of Gross National Income (GNI) annual growth (CAGR - Cummulative Annual Growth Rate) of 6% from now to 2020 which will increase GNI from USD188 billion to USD523 billion in 2020 resulting in income per capita of USD15,000 from a low USD6,700 that we have today.

1. High Income - USD15,000 GNI per capita by 2020.
2. Inclusiveness - All races are given equitable opportunities.
3. Sustainability - Wealth for a long time.

Such an aspiration requires significant injection into the equation. I remember when I was studying economics, the Gross Domestic Product (GDP) is essentially the measure of output for a nation that is best described as Aggregate Demand. Aggregate Demand is a function of Consumption, Investments, Government Spending, Exports net of Taxes and Imports. The relevant variable in light of ETP would be Investments and Government Spending. It will be interesting to see how the Malaysian Government apply this. By right, if the neo-classical believes of Aggregate Demand is true, the nation should see prosperity by the end of the second decade of the millenium.

EPP is expected to create 3.3 million jobs in the 'mid - high' income bracket. This is a decent figure given that the Malaysian population is expected to grow by 4 million from 2011 to 2020.

To help achieve this High Income status, the Government is/will be injecting necessary investments into the economy. Whether or not the funding is public money or private, is besides the point. Bottom line is, there is/ought to be significant injection into the economy. 131 Entry Point Projects (EPP) have been introduced to fuel the development of 12 National Key Economic Areas (NKEA) as listed below:

1. Finance
2. Palm Oil
3. Business Services
4. Telecommunication
5. Health
6. Algriculture
7. Oil & Gas
8. Education
9. Tourism
10. Wholesale
11. Retail
12. Greater Kuala Lumpur (KL)

These 131 EPP is expected to create 3.3 million jobs in the 'mid - high' income bracket. This is a decent figure given that the Malaysian population is expected to grow by 4 million from 2011 to 2020. EPP will require high funding, in the region of RM444 billion. Government has committed to contribute 8% of that funding whereas the remaining 92% is urged to be contributed by the private sector with a split of 40:60 between Government Linked-Companies (GLC) and Non-GLCs with 73% from domestic direct investments and 27% from foreign direct investments.

All these targets are good to know but whether achieveable? only God knows. We, however, may not necessary have to wait for God's miracle. Efforts are being implemented as we speak and the results are positive. Quarter 1 of 2011 recorded GDP of 4.6%. This is lower than the 6% target. There is hope. The Government is predicting that 2011 will close with an average of 5% to 6%, a level which is on border line that needs to be monitored and maintained closely in the next decade if 2020 is to be a celebrated year. We have achieved an average of 6% - 7% in the past (1945 to 2008). So, now all we have to do is to extrapolate that efforts (in the past) into the future.

These 3 (NKEAs, SRIs and KPIs) will provide the key elements necessary for the ETP to progress, which are Focus, Competitiveness and Results

A group of 1,000 Chief Executive Officers (CEO) from Multinational Companies (MNC), GLCs, Small and Medium Enterprises (SME) and other private and public players met to brainstorm what is needed to manifest the road map to 2020 economically. This was how the NKEAs and EPPs had emerged as the focus point for everyone. There is no use of having cars when there are no highways. To embrace such analogy, the NKEAs is believed to require policy synchronisation, which is done by the Government by its Strategic Reform Initiatives (SRI). Key Performance Indicators (KPI) is also required to measure the results (eg. GNI, Jobs). These 3 (NKEAs, SRIs and KPIs) will provide the key elements necessary for the ETP to progress, which are Focus, Competitiveness and Results.

Income per capita is not necessarily a function of quantum alone. It is also a function of quantity. As mentioned earlier, EPPs are expected to create 3.3 million jobs. These jobs will require resources to fill it. For this, the nation's educational blueprint will also be synchronised to ensure that Malaysians are given the opportunity to fill up roles as a matter of priority from those imported from foreign countries. It is expected that 46% of these jobs will require human resources at vocational and diploma level.

So far, only 72 projects have commenced for 54 EPPs. These projects will cost RM106 billion. It is a huge sum of money but if measured against the expected return of RM153 billion GNI per year for 298,865 new jobs, it is a worthwhile investment. These figures show that ETP is the right choice for the nation's future. However, 2020 is far away. The Government in 2020 may not be the same Government today. How do we ensure continuous efforts and commitment is long lasting? The last thing we want is for the Government to foresake the ETP simply because different sets of politicians with different ideologies are in power in the future. To counter this, Government (via Civil Servants and Ministries) will have their appraisals linked to the ETP.

In January 2011, Bursa Malaysia recorded 1,572 points, a good starting point to economic excellence. Some believe that this is the market reaction to the confidence in the Government's efforts to enhance the economy. Let's just hope that this is genuine rather than speculative.





* kopihangtuah



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My Malay Dilemma

www.kopihangtuah.blogspot.com

"Whether to continue progressing in a multinational company" or "...to help contribute to develop local companies, ie Malay companies, ie GLCs"

alay I am, and I am proud of it. Often when people talk about Government Linked Companies ('GLC'), they equate it to Malays. Naturally, I wouldn't disagree simply because most observations of GLCs would conclude that Malays are the driving force behind it, whether or not, in some cases, that may not be true. Nevertheless, on a hyphothesis basis, let's assume just that in this article.

Like many critics, I too feel sad of where the Malays are in Malaysia. Despite the numerous efforts and resources channelled to them (Malays), their progression seems to be in the first gear still - evident by the 18% equity ownership in the market. Some of these resources are given on the basis of economic equality that is viewed by many as racial discrimination. Having worked in multinational firms, both domestic and in foreign countries (Australia, The United Kingdom and United States territory), I have the privilege of confirming that the Malays have tonnes of work to do before they can be on par with their counterparts in Malaysia.

A more detailed analysis of this phenomenon can be obtained from various literature such as The Malay Dilemma and A Doctor In The House by Tun Mahathir. However, I do not wish to share the essence of those literature here. I feel compelled to share my experience in life on this matter. Like many others, I too faced "My Malay Dilemma". The 'many others' I am referring to are the Malays who have achieved significant level of education and professional careers. They are the accountants, bankers, lawyers, engineers, valuers, etc. These 'new' breed Malays obtained their training from multinational organisations across the globe. When it was time for them to return to Malaysia, they faced the dilemma of "Whether to continue progressing in a multinational company" or "...to help contribute to develop local companies, ie Malay companies, ie GLCs".

My story is a colourful one. I went to a boarding school. One of those set up by the Government to provide opportunities for the Malays. Scoring A's in SPM wasn't enough. I had to win a scholarship to study in Australia. Hunger for progression, I managed to get a job in Australia. In Australia, all the sexy jobs are given to the locals whereas the messy ones are given to Asians. It didn't matter to me. I sustained my objective and in the end, I was worthy of being called a Chartered Accountant. I even explored working in the Pacific Islands (U.S. Territory Guam, Marshall Islands and Marianna Islands).

Then it was time to return to Malaysia. Having enjoyed a scholarship, I was meant to serve the nation via a GLC. I had negative perceptions towards GLCs back then. In my mind, GLCs are slow, not robust, not motivated and complacent. Whilst there may be some truth in those perceptions, I think I was being unfair. Nevertheless, at that time, those were my thoughts. So I breached the contract and joined a multinational firm in Malaysia. In doing so, I had to pay back what I owed the Government for sending me overseas. In fact, I am still paying and it'll probably be fully settled by 2020. It feels like settling a home loan. Rest assured, the money that I am paying back gets channelled to others in a form of scholarship given that it is payable to a trust fund for education.

"If GLCs are drained of experienced and professional skilled workforce, it'll never progress"

So low my view of GLCs that I'd rather continue to develop my career in a multinational company. I even worked in a London office of that multinational firm. In London I faced the same soft discrimination - all the sexy jobs are given to the locals whereas the messy ones are given to Asians. In total, my experience in a multinational firm was approximately 13 years, of which, 5 years were in foreign countries. That in itself is a significant exposure. One that I feel so lucky because many others would have loved to grab such opportunities.

After all those years, something happened. A revelation of sort. The type that caused paradigm shift to my thinking. One evening, I had a chat over coffee with my work colleagues, mostly non-Malays. They shared their views of GLCs. Nothing surprising actually. Their views were congruent with mine only this time, I felt the shame for the Malays and most importantly, I was ashamed of myself for not contributing to GLCs. Had I not leave the GLC I was intended to serve, I would have been able to contribute to change the GLCs. At least it would have made a difference to the eyes of others, who knows? The light bulb appeared with the subliminal message of "If GLCs are drained of experienced and professional skilled workforce, it'll never progress".

Maybe my career progression in multinational organisations was preordained. Preordained to get the necessary training preparing myself to contribute to GLCs significantly. I surely hope so. So after 13 years of 'preparing' myself, I felt it was time for me to embark on a new chapter of my life journey. I went for many job interviews, some are GLCs, some are not, and some are multinationals. My general feeling of those interviews is that people from GLCs welcome those with multinational background and people from multinationals and non-GLCs prefer not to hire anyone who are not from any other multinationals or non-GLCs. It is indeed a sad scenario. Of course this is not confirmed. It is just my reading of the under current sentiments of the 'employer' market.

Throughout my career in multinationals, I have always practiced a 'level-playing field' policy when dealing with my subordinates. I disregard ethnic background when it comes to appraisals and I dislike not having a mix-team of workers. I have always demanded that my teams comprise a fair balance of Chinese:Indian:Malays. Whilst this can be viewed to be a 'special' attention to allow Malays the opportunity, I strongly feel that the balance it creates is too valuable for me to ignore. Honestly, I think very highly of the Chinese and Indians in Malaysia. They are very hard working and they'll get their objectives achieved at whatever cost necessary. Such character is so condusive for the Malays to transform themselves. What other more appropriate environment would there be for the Malays to learn? Work amongst Malays? A big No, No. That is exactly what happened/happens to Malay student who studied overseas, they stuck/stick to themselves, me not excluded.

In a nut shell, I am an advocate of giving the Malays opportunities but I despise them for taking things for granted, but not all of course. It is truly a complex matter - one that appears unfair on the surface but makes sense if embraced with sincerity.

I have many non-Malay friends. Some are quite close to me. Some I still meet for drinks and chats. Some work for multinationals. Some work for GLCs! They know how I feel because I have always been frank to them on what I feel about Malays, GLCs and the political landscape of Malaysia. I realise that some of the readers of this article may be non-Malays: My sessage to you is - I am not racist, but I am concerned about the socio-economic status of the Malays. My views consist of both negative and positive arguments, but balanced. In a nut shell, I am an advocate of giving the Malays opportunities but I despise them for taking things for granted, but not all of course. It is truly a complex matter - one that appears unfair on the surface but makes sense if embraced with sincerity.

Back to my job hunting saga. I finally found a perfect job for myself. The company is not technically a GLC but its profile and the forces influencing it can deem it to be a GLC. It is a public listed company. The job was a senior post but without the "C" at the front of its designation. It was probably not high enough for me to effectively exert my influence to change things but it was certainly adequate for me to influence the "C" suits to make changes. I have been there since and soon I will celebrate my 2nd anniversary. Throughout the 23 months of serving this company, I feel that I have contributed a lot. Contributions which I think worthy of being regarded as catalyst for change, good change that is. Even so, I feel that there is a lot more to be done. I find myself so motivated to do more because the more visible the results are to me, the more I want to inject my input.

Every now and then, I'd meet my friends again, particularly the non-Malays. I continue to have healthy chats and debates about Malays, GLCs and the political landscape in Malaysia. Sometimes I feel angry not because of the things they say, but because of the things Malays are doing,.. err, correction, what they are "not" doing. The 50 year old perception of Malays still survive until now. I do not know how much we need to do to change this perception. There is no one to blame other than the Malays themselves. This is because statistics and facts seem to suggest it. I must admit that I also felt/feel angry with those who made/make negative comments about Malays and GLCs. Maybe because I feel that those critism were targeted at me, although I know that it was meant for generalisation. That generalisation (about the Malays) gave me clarity in answering "My Malay Dilemma : 'Whether to continue progressing in a multinational company' or '...to help contribute to develop local companies, ie Malay companies, ie GLCs". I think you can guess what my answer would be....





* kopihangtuah



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